Roo hopes ride on superjumbo

By Matt O'Sullivan

22 September 2008 — 12:00am

IT WAS a long time coming but Geoff Dixon's wide grin suggested it was at least partly worth the wait. The departing boss of Qantas and his successor-in-waiting, Alan Joyce, were a likely pair in the south of France on Friday night as they waved off their first A380 superjumbo amid a ritzy lightshow at the Airbus base in the rugby-mad city of Toulouse.

Just over 30 hours later the double-decker jet arrived in Australia to thousands of keen plane spotters and Qantas workers at Sydney Airport. More than two years had passed since Airbus was due to hand over the world's largest passenger aircraft.

Dixon has held firm to his belief that the Airbus heralds a new era in aviation and that the decision taken eight years ago to purchase the aircraft, when he was the Qantas CEO-in-waiting, was the right one.

So he should. There is a lot riding on the success of the A380 - not least the potential for what Dixon terms a "circuit-breaker" after a series of damaging incidents in recent months, including a 10-week stand-off with engineers and the emergency landing of a Boeing 747 in Manila in July.

The touchdown will go some way to easing pressure on Airbus, too. Delivery delays of its flagship model have cost the company hundreds of millions in damages payments to airlines, including Qantas, which has received more than $200 million.

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The delays led Qantas to defer plans to retire its ageing fleet of Boeing 747-300s until the end of the decade, and Dixon didn't pass up on the chance to remind the European manufacturers of this at the handover ceremony in France.

Joyce was just as willing to remind Airbus of its costly venture. "Airbus was telling us that they've invested $20 billion in this product and they're probably never going to get that money back. They'd have to sell 500 aircraft to get anywhere near it.

"So who benefits out of that?" Joyce asked. "The airlines benefit out of it because we've got product that's got a huge amount of investment out of it."

The affable Irishman will not disclose what Qantas paid for its 20 superjumbos, but the bill must be considerably less than the listed price of $US327 million ($392 million) because Joyce has said: "Whoever pays the list price is getting screwed."

Qantas's first long-range superjumbo, the Nancy Bird Walton, will begin commercial services next month from Sydney and Melbourne to Los Angeles - a year after the airline's arch rival, Singapore Airlines, pressed its superjumbo into service between Singapore and Sydney.

The Asian carrier's headstart was obvious to the 80-odd passengers aboard the Nancy Bird Walton during her maiden flight as she taxied past two Singapore A380s at Changi Airport during a stopover on Saturday night.

Qantas will take delivery of another two A380s this year. Its order for 20 is the second biggest from Airbus after the Middle Eastern airline Emirates, which took the first of 58 in July.

Dixon and Joyce said on Friday they plan to boost the A380 fleet further but intend to keep within the airline's $35 billion budget for new aircraft.

Since the hype surrounding the maiden commercial flight of Singapore Airlines's A380 last October, aviation has been turned on its head by a downturn triggered by high jet fuel prices and slowing economies.

Dixon said turmoil in world financial markets would result in fewer passengers but forward bookings at Qantas and Jetstar over the past month had been encouraging. He hopes the A380 will give the airline a cost and product advantage over its competitors.

"We are not seeing it as badly as some other airlines are indicating. The Australian economy is being affected but it's stronger than the the US and UK economies at the moment."

Qantas will expand its A380 services in January when it begins tackling Singapore Airlines head on by flying the Sydney-Singapore and Sydney-London routes. Singapore Airlines has six A380s in operation and 13 on order.

"Obviously there will be great fanfare and a rush by some people to get on board the first A380," a Shaw Stockbroking analyst, Brent Mitchell, said. "But I don't really see any major changes - it's just moving people from the 747s to the A380s."

Airbus did its best to stoke interest in the aircraft in 2005, and talk extended to how premium passengers would be offered everything from gyms and massage rooms to casinos. But this has proved largely unfounded. The Qantas A380s boast a small lounge on the upper deck but will not provide the luxury of their competitors: Singapore Airlines offers first-class suites with double beds, and Emirates boasts bathrooms with showers.

Qantas hopes the A380's capacity to fly 10 per cent farther than that workhorse of the skies since the 1970s, the Boeing 747, will overcome the handicap of less than a full load of passengers and freight across the Pacific. But Mitchell says the A380 will lower operating costs because of its lower fuel burn "so long as they are able to fill the aircraft".

Qantas has yet to determine a site for heavy maintenance of the A380 and its yet-to-be-delivered fleet of Boeing 787 Dreamliners. The need for such maintenance is years away, but the arrival of the Nancy Bird Walton highlights union concerns about the site of major checks on aircraft such as the A330, which is due soon.

"We would be seeking a commitment for long-term heavy maintenance of all its aircraft [in Australia]," the assistant national secretary of the Australian Manufacturing Workers' Union, Glenn Thompson, said. "We want to have that discussion with Qantas."

Analysts believe Qantas will seek to carry out the maintenance in South-East Asia, where its competitors benefit from lower labour costs, and Dixon will not rule out that option, although he has reiterated Qantas's stance that it will retain more than 80 per cent of overall maintenance in Australia.

The A380 did not join Singapore Airlines and Emirates without a hitch. Singapore encountered its first mishap in January when a jet came loose from a tow truck at Changi Airport and rolled off the tarmac onto a grass verge.

Emirates had been flying the A380 for just over a month when it put a halt to trips between Dubai and New York because, according to one report, of an electrical fault, although the carrier said officially the halt was caused by engineering work.

Dixon does not expect any trouble with his latest aircraft but said "we have to be realistic about this". And realistically, even a slight problem with the A380 would be a nightmare for his successor in light of all the work Qantas has done in recent months to cover any scenario.